1986 (5) TMI 49

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....he expenditure incurred by the assessee for sales promotion could be considered as advertisement expenditure and disallowed under s. 37(3A). 2. The assessee is a firm having a business in textiles. They had incurred an expenditure of Rs. 55,796 for the asst. yr. 1979-80 in respect of advertisements etc. The ITO, invoking the provisions of s. 37(3A), disallowed 15 per cent thereof, i.e., Rs. 8,3....

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....er appeal before us. The expenditure for the year 1979-80 is given below: Painting of the name board Rs. 7,554 Calendars Rs. 5,738   Rs. 13,292 Data Pads Rs. 821 Weekly Advertisements Rs. 500 Souvenirs Rs. 3,007   Rs. 17,620 We are unable to accept the assessee's submission that there is no element of advertisement in all of them. We will, how....

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....of Rs. 28,305 has also to be excluded since that represents packing materials. The goods purchased from the assessee have to be properly wrapped and if the name of the assessee is printed on these wraps it could not be considered purely as advertisement expenditure. Primarily they are for packing of the goods. So this amount has also to be excluded. The rest of the expenditure are properly treated....